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“The people have made the choice of rupture (…) We have the historic responsibility to consolidate our sovereignty by breaking the chains of economic dependence,” launched the new president of Senegal in a grandiloquent speech at the end of the elections.
He also saluted the heroes who “challenged the odious colonial system and its so-called civilizing mission”, thus announcing the beginning of an era of change.
On Tuesday, the new Senegalese president appointed Ousmane Sonko as Prime Minister and among the priority subjects on the agenda of the Faye-Sonko tandem is the abandonment of the CFA franc, a decision which arouses considerable interest on a continental scale .
What is the CFA franc?
Created in 1945 as part of the Bretton Woods agreements, the CFA Franc, or “Franc for the French Colonies of Africa” before being renamed “Franc for the French Communities of Africa” in 1958, was a symbol of the economic and monetary influence of France on its former colonies in Africa.
It was intended to control the cost of access to raw materials from the colonies and to protect the French territory from other monetary blocs controlled by the United Kingdom, the “sterling zone”.
Unlike its British counterpart, which disappeared in the second half of the 20th century, the CFA Franc still exists in 14 African countries. The CFA Franc offers France’s guarantee of convertibility, fixed parities, free transferability and centralization of foreign exchange reserves.
In return, the issuance and printing of money takes place in France, in the commune of Chamalières in Puy-de-Dôme, and countries using the CFA Franc are obliged to deposit at least 50 percent of their foreign exchange reserves. to the French Public Treasury, which explains why it is called “colonial currency” by its detractors.
A symbol of colonial dependence
Throughout his electoral campaign, Bassirou Diomaye Faye had expressed his firm commitment to restoring the monetary sovereignty of Senegal, the CFA franc being often perceived as a colonial vestige.
Like other countries such as Mali, Niger and Burkina Faso which openly rejected the French presence on their soil and threatened to abandon the CFA franc, Senegal is now positioning itself at the heart of this dynamic.
The decision of Senegal, a country enjoying regional stature, a dynamic population and a developing economy, but also a significant influence on its neighbors, would have direct and indirect repercussions on the thirteen other countries which still use this currency.
The possible abandonment of the CFA franc raises varied reactions within Senegalese society and beyond.
While supporters of Faye and Sonko consider this initiative as a crucial step towards economic emancipation, emphasizing the symbolic nature of maintaining the CFA franc, perceived as a form of economic supervision of France, supporters of maintaining the CFA franc , thus highlight the advantages of economic stability and convertibility that it offers to the countries of the franc zone.
Neither the transition from the franc to the euro nor attempts at reform, such as those proposed by Emmanuel Macron and Alassane Ouattara in 2019, have truly altered monetary relations between the countries of the franc zone.
The announcements of reforms, including the future introduction in 2027 of “eco” by Emmanuel Macron, were perceived by many African experts as maneuvers aimed at preserving French economic interests, without really calling into question the dynamics of addiction.
Single currency or national currency?
If the general opinion in favor of abandoning the CFA franc is widely shared by economists and the populations concerned, the transition to an alternative remains a major challenge.
Some fear a period of economic chaos in the event of a hasty and poorly prepared abandonment.
Among the various proposals raised over time, that put forward by the Economic Community of West African States (ECOWAS) seems to be gaining popularity: the idea of establishing a common economic zone with a single currency for all the countries in the region, based on the model of the euro zone.
The new Senegalese president seems to be in favor of this approach. However, Senegal fears the potential weight of Nigeria in this new entity.
As a demographic (most populous country in Africa) and economic power, Nigeria represents 66% of ECOWAS GDP and exerts an undeniable influence in the region. But the country must face community tensions and a high level of corruption, which arouses reluctance among its neighbors.
The discovery of gas and oil deposits off the Senegalese coast could reshuffle the cards and give Senegal the necessary room to maneuver to go it alone to unilaterally break with the CFA franc and create a national currency.
The multiple variables attached to a project of this magnitude make it a real challenge in this sub-region.
Macron
Senegal, from prison to the presidential palace, who is Diomaye Faye?
Is this a call from destiny for Bassirou Diomaye Faye? The day of his 44th birthday celebration coincided with the unofficial announcement of his victory in the Senegalese presidential election, on March 25.
However, on March 14, when he crossed the gate of Rebeus prison in Dakar a free man, thanks to a presidential amnesty, he was far from imagining that he would become the 5th president of Senegal, ten days later .
While awaiting the official results, the trends emerging from the polls credit the Pastef candidate with a comfortable lead of 57% of the votes against 35% for his competitor Amadou Bâ.
“In view of the trends in the results of the presidential election and while awaiting the official proclamation, I congratulate President Bassirou Diomaye Diakhar Faye for his victory in the first round,” indicated Amadou Bâ, the candidate of the presidential movement in a press release .
Never seen before in Senegal which, in 64 years of independence, has never experienced a coup d’état! Which is rare in Africa.
Sovereignist and Pan-Africanist
During the brief electoral campaign, the former trade unionist outlined the strong ideas of his program.
Sovereignist and follower of pan-Africanism, the coalition supporting Diomaye announced during the electoral campaign that it was in favor of monetary reform leading to the adoption by Senegal of its own currency. But Ousmane Sonko, the leader of Pastef, qualified the party’s position.
“Our approach has always been to say that there is a problem with this currency and that it does not fit with our development imperatives. 90% of the countries in the world have their currency and get by. We have to assume our responsibilities to move towards something else, but we will do it first of all within the framework of discussions.”
Often accused of being populist by his critics, the Pastef candidate during the campaign stressed the need for reciprocally beneficial relations with “partners”.
Addressing Senegal’s partners in particular in his first statement to the press, he stressed that “(…) Senegal will always hold its place, it will remain the friendly country and the safe and reliable ally of any partner who “will engage with us in virtuous, respectful and mutually productive cooperation”.
In the sub-region, opinion already attributes to it a redefinition of the new bases of relations with France, the former colonizing power.
The Ivorian newspaper La Voie Originale, close to the opposition, carried the headline “Bassirou Diomaye Faye elected 5th President, Françafrique collapses in Senegal”.
On the internal level, the elected president of Senegal, during his first statement to the press, promised to tackle “national reconciliation” as a priority.
This can be understood, explains Senegalese political scientist Mountaga Diagne of Gaston Berger University in Saint-Louis, “the electoral campaign was harsh, with a judicialization of politics. Many opponents went to prison. There was resentment.”
Bassirou Faye also spoke of “the refoundation of institutions”. “The last election showed that the president concentrated a lot of powers like a ‘constitutional monarch’. There is also a desire to fight corruption with healthy and virtuous management,” analyzes Mountaga Diagne.
“A significant reduction in the cost of living is also at the center of the Pastef project. Covid has deteriorated the living conditions of most Senegalese people who live day to day,” explains the political scientist.
“The fight against the state’s lifestyle could make it possible to free up margins, thanks in particular to the fight against budget-consuming institutions,” continues the political scientist.
The imminence of hydrocarbon exploitation could offer Bassirou Diomaye Faye the means to implement Pastef’s political program.
Madeline Fass
Christopher Luu
Amandine Lhoste
Alexis Parker